LABOR AND SOCIAL

LEGISLATION
Employee A, filed a complaint before the DOLE for underpayment of wages, illegal deduction, non-
payment of night shift differential pay, overtime pay etc. The aggregate amount did not exceed P
5,000.00. X Corp. filed its position papers. Subsequently, A claimed backwages on account of his
alleged constructive dismissal. The Regional Director ruled for A. X Corp.’s motion for
reconsideration was denied. On appeal, X Corp. claimed that it was the Labor Arbiter, not the
Regional Director who has jurisdiction as the case involved a termination dispute. Resolve.

The contentions of X Corp. are not meritorious.

(1) X Corp. is estopped from questioning the jurisdiction of the Regional Director. It took part in the
proceedings before the Regional Director by submitting its position papers. It even asked the
Regional Director to reconsider its decision after the resolution was adverse to its interest.
(2) The Regional Director did have jurisdiction over the complaint which was originally for violation of
Labor Standards (Art. 128(b) ). Only later did A ask for backwages on account of his constructive
dismissal. Once vested, that jurisdiction continued until the entire controversy was decided. (Odin
Security Agency v Hon. De La Serna).

(a) A 3-star hotel would like to have an apprenticeship program covering dishwashers. Will this be
allowed?
(b) What are “highly technical industries”?

(a) No. Apprenticeship is allowed only in a trade, form of employment or occupation which requires for
proficiency more that three (3) months of practical training on the job supplemented by related theoretical
instruction and only in “highly technical industries”. This is referred to as an apprenticeable occupation (Article
58[c], LABOR CODE). The Secretary of Labor and Employment by appropriate orders determines what trades
or occupations are apprenticeable.
In the present problem, the work of dishwasher cannot be deemed apprenticeable. Proficiency
therein can be attained within a very short period. Besides, the hotel industry is not highly technical.
(b) They are industries engaged in the application of advanced technology. (Implementing Rules, Book II,
Rule VI, Section 2[j])

Who is an understudy?

An understudy is any qualified Filipino citizen designated by a local employer to be trained by a foreign
national allowed to work in the country by virtue of an employment permit granted him by the Secretary
under an approved understudy training program. (Implementing Rules, Book I, Rule I, Section 1[l])
There must be at least two (2) understudies for every alien worker. Such understudies must be the
most ranking regular employees in the section or department for which the expatriates are being hired to
insure transfer of technology. (Implementing Rules, Book I, Rule XIV, Section 5[c])

4. Maria works as clerk-typist in the Our Lord Orphanage, a private charitable institution that subsists
on donation or voluntary contributions. She worked for ten (10) hours a day. Is she entitled to
overtime compensation? Why?

Yes, she is entitled to overtime compensation for two hours daily. The fact that her employer is a
charitable and a non-profit institution is of no significance. The provision of the Labor Code on overtime covers
both profit and non-profit establishments or undertakings.

Some sales personnel of Company “X” start their field work at 8:00 a.m. after reporting to the office,
and come back to the office at 4:00 p.m. of the same day.
(a) Are the sales personnel considered as field personnel under Article 82 of the Labor
Code? Why?
(b) Are the sales personnel entitled to regular holiday pay?
 (a) Yes. Their actual hours of work in the field cannot be determined with reasonable certainty. The period
between 8:00 a.m. and 4:00 p.m. comprises their hours of work in the field, the extent or scope and result of
which are subject to their individual capacity and industry. In deciding whether or not an employee’s actual
working hours in the field can be determined with reasonable certainty, query must be made as to whether or
not such employee’s time and performance is constantly supervised by the employer.
(b) No. Since they are considered as field personnel they are not entitled to regular holiday pay. (Union of
Filipro Employees vs. Vivar Jr.; G.R. No. 79255; January 20, 1992)

Faculty members of a non-profit educational institution are paid by the hour and are obliged to work
and consent to be paid only for work actually done. Are they entitled to holiday pay for unworked
regular holidays?

No. Regular holidays specified as such by law are known to both school and faculty members as ‘no class
days”, certainly the latter do not expect payment for said unworked days, and this was clearly in their minds
when they entered into the teaching contracts. There is no diminution of the income of the faculty members.
(Jose Rizal College vs. NLRC; G.R. No. L-65482; December 1, 1987)

Under the New Labor Code, name at least three (3) provisions which are designed to protect working
women.

Some provisions of the Labor Code of the Philippines which are designed to protect working women
are as follows: [i] Nightwork prohibition (Art. 130); [ii] Facilities for women (Art. 132); [iii] Maternity leave
benefits (Art. 133, superseded by Section 14-A of the Social Security Law); [iv] Family planning services
(Art. 134); [v] Discrimination prohibited (Art. 135); [vi] Stipulation against marriage (Art. 136); [vii]
Prohibited acts (Art. 137); and, [viii] Classification of certain women workers in nightclubs and similar
establishments (Art. 138)

What is wage distortion and how is wage distortion settled?

Wage distortion is a situation where an increase in prescribed wage rates results in the elimination or
sever contraction on intentional quantitative differences in wages or salary between and among employee
groups in an establishment as to effectively obliterate the distinction embodied in such wage structure
based on skills, length of service and other logical basis of differentiation.

Four principles in wage distortion

a. Existence of grouping or classification of employees which establishes distinction among
them for some relevant basis.
b. Government decreed increase in minimum wage or merger of two companies.
c. Reestablishment of substantial or significant gaps between wage rates of employees.
d. Reestablishment is based on process established by law.

The processes of settling wage distortion are as follows:

a. If with union
 Negotiation between union and management
 If unresolved, grievance procedure
 If unresolved, voluntary arbitration

b. If no union

 Employer and employees endeavor to correct distortion

 If unresolved, settlement through National Conciliation and Mediation Board
 If unresolved, NLRC

Discuss the state policy on the assessment of the attorney’s fees within the context of Art. 111 and 222
(b) of the Labor Code.

In Article 111 of the Labor Code, attorney’s fees shall not exceed 10% of the amount of wages
recovered, in cases of culpable withholding of wages of an employee. On the other hand Article 222 states
that Attorney’s fees arising from any collective bargaining negotiations or conclusion of the collective
agreement, shall not be imposed on any individual member of the contracting union. However, it may be
charged against union funds in an amount to be agreed upon by the parties.

What is a RED CIRCLE RATE ALLOWANCE? Is it part of the basic salary?

 A red circle rate allowance is an amount, not included in the basic salary that is granted by the
company to an employee who is promoted to a higher position grade but whose actual basic salary at the
time of the promotion already exceeds the maximum salary for the position to which he or she is promoted
(Meralco v Secretary of Labor, G.R. No. 127598, January 27, 1999)

Does promotion of an employee automatically entitle him to an increase in his salary? Explain.

No. While promotion is usually accompanied by an increase in salary, such increase is dependent
upon the employer in the absence of a contractual stipulation or established company policy. Promotion
may denote an advancement merely in rank without an equivalent increase in salary. The matter of salary
increases is a management prerogative (National Federation of Labor Unions, et al., vs. NLRC, et al.; G.R.
No. 103575; April 5, 1993)

When may a non-lawyer appear before the NLRC or Labor Arbiter?

a) If he represents himself as a party to the case;

b) If he represents an organization or its members, provided that he shall be made to present written proof
that he is properly authorized, or
c) If he is a duly-accredited member of any legal aid office duly recognized by the DOLE or IBP in cases
referred to by the latter.

What is the Accretion Doctrine in Labor Relations?

Accretion in Labor Relations occurs when a large entity absorbs or integrates one or more plants
engaged in the same or substantially the same business and have employees during the same or
substantially the same kind of work but with existing separate collective agreements with different labor
unions.

What are the requisites for a valid quitclaim?

a) it must be voluntary
b) there was no fraud on the part of any parties
c) consideration of the quitclaim is credible and reasonable
d) the contract is not contrary to law, public order, public policy, morals and good customs or prejudicial to
a third person with a right recognized by law (More Maritime Agencies, Inc. v NLRC, G.R. No. 124927,
May 18, 1999)

What is the “PRINCIPLE OF SHARED RESPONSIBILITY”?

It refers to the provision of 1987 Constitution which mandates the workers to participate in policy and
decision-making processes of the establishment insofar as said processes directly affect their rights,
benefit and welfare.

16. What is the basis of the right to self-organization?

Under the1987 Philippine Constitution:

Art. III Sec. 8 – The Right of the people, including those employed in the public and private sectors to form
union, associations, or societies for purposes not contrary to law shall not be abridged.
Art. XIII Sec. 3 – The State shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the right to strike in
accordance with law.

Under the Labor Code:

Art. 3 – The State shall afford protection to labor, promote full employment, ensure equal work
opportunities regardless of sex, race or creed, and regulate the relations between workers and
employees. The State shall assure the rights of workers to self-organization, collective bargaining,
security of tenure, and just and humane conditions of work.
Art. 246. NON-ABRIDGEMENT OF RIGHT TO SELF-ORGANIZATION - It shall be unlawful for any person
to restrain, coerce, discriminate against or unduly interfere with employees and workers in their
exercise of the right to self-organization. Such right shall include the right to form, join, assist labor
 organizations for the purpose of collective bargaining through representatives of their own choosing
and to engage in lawful concerted activities for the same purpose or for their mutual aid and protection.
Art. 269 – All aliens, natural or juridical, as well as foreign organizations are strictly prohibited from
engaging directly or indirectly in all forms of trade union activities without prejudice to normal contacts
between Philippine labor unions and recognized international labor centers: provided, however, That
aliens working in the country with valid permits by the DOLE, may exercise the right to self-organization
and join or assist labor organizations of their own choosing for purposes of collective bargaining;
Provided, further, That said aliens are nationals of a country which grants the same or similar rights to
Filipino workers.

When is the mechanics of collective bargaining set in motion?

The mechanics of collective bargaining is set in motion only when the following jurisdictional
preconditions are present:

1) possession of majority status of the employee’s representative in accordance with any of the means of
selection under the Labor Code;
2) proof of majority representation;
3) a demand to bargain which must be unequivocal and clear; hence, an employer is not in default
respecting the duty to bargain until a request therefore has been made.(Kiok Loy vs. NLRC)

What are the requisites that must be complied with in order that the special assessment for Union’s
incidental expenses, attorney’s fees, and representation expenses be valid?

1) authorization by a written resolution of the majority of all the members at the general membership
meeting duly called for the purpose;
2) secretary’s record of the minutes of the meeting; and
3) individual written authorization for check-off duly signed by the employee concerned.

19. May aliens join labor unions in the Philippines?

As a general rule, aliens cannot join labor unions in the Philippines; they are prohibited under Article
269 of the Labor Code from engaging directly or indirectly in all forms of trade union activities. However,
under the same article, as amended by Republic Act 6715, aliens working in the Philippines with valid
permits issued by the Department of Labor and Employment may exercise the right to self-organization and
join or assist labor organizations of their own choosing for purposes of collective bargaining provided that
said aliens are nationals of a country which grants the same or similar rights to Filipino workers.

20. What are the factors in determining an appropriate bargaining unit?

1) Community or Mutuality of Interest Test – reflected by substantial similarity of work, duties,

compensation and working conditions;
2) Globe Doctrine or the Express Will or Doctrine of the Employees Test – In such a case where the
considerations are so evenly balanced as to render doubt in determining the appropriate bargaining
unit, the desires of the employees themselves become relevant and the best way to determine their
preference is through a referendum;
3) Prior Collective Bargaining History – it may be assumed that the court will not disturb the composition of
a considered bargaining unit which has an established existence, and has in its past dealings with the
employer, demonstrated its services to the collective bargaining purposes of the act.

4) Employment Status – there are certain positions and categories of work which, by their nature, place
the employees in a position wherein a conflict of duties and interest exists.

21. How would you reconcile union security clause with security of tenure?

A union security clause is a contractual limitation upon the security of tenure of an employee. Pursuant to
the union security clause, such as closed shop, union shop or maintenance of membership clause, voluntarily
entered into by the workers’ bargaining representative, and the employer, an individual’s employment may be
validly terminated. Laws recognizing the validity of union security clauses are enacted pursuant to the police
power of the State; they are intended to make unions strong, thereby becoming effective instruments for the
protection of the workers’ rights. The security of tenure of an employee must yield to the operation of a valid
union security clause.
22. Distinguish between the following

a) Discrimination as an act of unfair labor practice when committed by an employer and

discrimination when committed by a labor organization

BY AN EMPLOYER BY A LABOR ORGANIZATION

Exists when one is denied privileges given to A labor organization commits discriminatory
the other under identical or similar acts amounting to unfair labor practice if it:
conditions, EITHER:  Causes or attempts to cause an
 For purposes of encouraging or employer to discriminate against an
discouraging membership in any employee;
labor organization, OR  Discriminates against an employee
 To retaliate against an employee for whose membership in the union has
having given or being about to give been denied; or
testimony regarding the exercise of  Terminates the membership of an
the rights of self-organization by the employee with the union on grounds
workers. other than the usual terms and
conditions made available to other
union members.

b) Agency fee v check-off as a form of union financial security

AGENCY FEE CHECK-OFF

 Levied from non-members of the  Levied from the members of a union
bargaining agent (union) for the for the payment of union dues.
enjoyment of the benefits under the  May not be deducted from the
CBA. salaries of the union members
 May be deducted from the salary of without the written consent of the
employees without their consent. workers affected.

23. What is the bystander rule? What is the exception to the said rule?

As a general rule, certification election is the sole concern of the workers and the employer is regarded
as nothing more than a bystander with no right to interfere at all in the election. (Philippine Scout Veterans
Security and Investigation Agency vs. Torres, 224 SCRA 682 [1993]; Belyca Corporation v. Ferrer-Calleja,
168 SCRA 184 [1988]) The only instance or exception is where the employer is obliged to file a petition for
a certification election by reason of its workers’ request to bargain collectively. Even then, the employer’s
involvement ceases, and it becomes a neutral bystander after the order for a certification election issues.
(California Manufacturing Corporation v. Laguesma, 209 SCRA 606 [1992])

24. Union leaders of 123 Union alleged that the management refused to implement a provision of the
CBA despite a letter written by the union requesting for the said action. As a result, the union
decided to call for a strike based on unfair labor practice. Comment on the action of the union.

The action of the union is erroneous. According to Article 261 of the Labor Code, mere violation of the
CBA is not unfair labor practice. To be considered as ULP, there should be a flagrant and malicious
refusal to comply with the economic provisions of the agreement. In this case, since the union only sent
one letter, this does not amount to a flagrant and malicious refusal of the company to comply with the CBA.

The proper action for the union is to file a complaint in the grievance machinery. If it remains unresolved,
the case shall be referred to the voluntary arbitrator.

a) Assuming that the union sent 10 letters, which remained unanswered, and the company’s act
constitute ULP, can the case be referred for VOLUNTARY ARBITRATION without passing the
grievance machinery?

Yes. Generally, ULP is subject to compulsory arbitration (Labor Arbiter). But ULP can also be
submitted for voluntary arbitration upon agreement of the parties, without passing the grievance machinery.

As a general rule, voluntary arbitrators have jurisdiction over unresolved grievances. However, this
unresolved grievance refers to interpretation and implementation of the CBA, which does not constitute
ULP. In case it becomes ULP, this can be referred to voluntary arbitrators under Article 262 which grants
VA power to hear and decide all other labor disputes, including ULP and bargaining disputes.
25. What is a yellow dog contract?

It is a promise exacted from workers as a condition of employment that they are not to belong to, or
attempt to foster, a union during their period of employment.

26. What is “featherbedding”?

Featherbedding refers to the practice of the union or its agents in causing or attempting to cause an
employer to pay or deliver or agree to pay or deliver money or other things of value, in the nature of an
exaction, for services which are not performed or not to be performed. The essence of featherbedding is
the exaction of money or other things of value from the employer by the union. It is not featherbedding
where work is performed no matter how unnecessary or useless it may be.

27. What is the totality of conduct doctrine in Labor Relations?

The culpability of an employer’s remarks were to be evaluated not only on the basis of their implicit
implications, but were to be appraised against the background of and in conjunction with collateral
circumstances. Under this doctrine, expressions of opinion by an employer which, though innocent in
themselves, frequently were held to be culpable because of the circumstances under which they were
uttered, the history of the particular employer’s labor relations or anti-union bias or because of their
connection with an established collateral plan of coercion or interference (Insular Life Association Co.
Employees Association v Insular Life Association Co., 37 SCRA 244)

28. Due to the strike and the losses of the corporation, Mr. Tan decided to close the airline. The union
opposed the action of Mr. Tan saying that the assumption of jurisdiction of the Secretary of Labor
prevents Mr. Tan from closing the company. Decide.

Mr. Tan may close his corporation in the exercise of his management prerogative. Management
prerogative refers to the rights of the management to regulate all aspects of employment, provided that this
is done in good faith and not for the purposes of defeating the rights of workers under law or collective
bargaining agreements.

The provision on Article 264 on the effect of assumption of jurisdiction refers to strike or lockout.
Lockout is a temporary refusal of employer to furnish work due to an industrial or labor dispute. Closure
contemplated is due to losses of the corporation and is permanent in nature.

29. Due to financial loses San Miguel Corporation (SMC) shut shown some of its plants and declared 55
positions as redundant. San Miguel Corp. Employees Union (SMCEU), herein private respondent
union, filed several cases for the retrenched employees. During the grievance proceedings, most
of the employees were redeployed while the others accepted early retirement. As a result, only 17
employees remained to proceed with stage 3 of the procedure for the settlement of the grievances.
Upon being informed that if the remaining 17 could not be redeployed within the specified date their
services would be terminated, a representative of SMCEU declared a deadlock. SMCEU filed a
notice of strike before the NCMB. SMC filed complaint with NLRC praying that the notice of strike
should be dismissed in view of the no-strike clause and order the SMCEU to submit issues in the
notice of strike to grievance and arbitration. Should the notice of strike be dismissed.

The notice of strike should be dismissed.

In the case under consideration, the grounds relied upon by the private respondent union are non-
strikeable. The issues which may lend substance to the notice of strike filed by the private respondent
union are: collective bargaining deadlock and petitioner’s alleged violation of the collective bargaining
agreement. These grounds, however, appear more illusory than real.

Collective Bargaining Deadlock is defined as “situation between the labor and the management of the
company where there is failure in the collective bargaining negotiations resulting in a stalemate”. This
situation, is non-existent in the present case since there is a Board assigned on the third level (Step 3) of
the grievance machinery to resolve the conflicting views of the parties. Instead of asking the Conciliation
Board composed of five representatives each from the company and the union, to decide the conflict,
petitioner declared a deadlock, and thereafter, filed a notice of strike. For failing to exhaust all the steps in
the grievance machinery and arbitration proceedings provided in the Collective Bargaining Agreement, the
 notice of strike should have been dismissed by the NLRC and private respondent union ordered to proceed
with the grievance and arbitration proceedings.

As regards the alleged violation of the CBA, we hold that such a violation is chargeable against the
private respondent union. In abandoning the grievance proceedings and stubbornly refusing to avail of the
remedies under the CBA, private respondent violated the mandatory provisions of the collective bargaining
agreement.

Abolition of departments or positions in the company is one of the recognized management

prerogatives. Noteworthy is the fact that the private respondent does not question the validity of the
business move of petitioner. In the absence of proof that the act of petitioner was ill-motivated, it is
presumed that petitioner San Miguel Corporation acted in good faith.

30. Who has jurisdiction over the legality of a strike or lockout?

General Rule: The Labor Arbiter in the Appropriate Arbitration Branch of the NLRC.

However, where the issue of legality is raised in the dispute over which the Secretary assumed
jurisdiction or in dispute certified by the Secretary to the NLRC for compulsory arbitration, the same may be
resolved by the Secretary or Commission, respectively.

If the issue is submitted by the parties to voluntary arbitration, the question may be resolved by the
voluntary arbitrator or panel of voluntary arbitrators (NCMB Primer).

31. Y corporation, in order to improve the output capacity of their factories, came out with an order
limiting the employees privilege of having their coffee breaks to 5 minutes and the privilege of
going to the restrooms to 2 times a day. Mr. A, who is an avid Starbucks coffee drinker and who is
suffering from urinary tract disease did not like the idea, so he filed a complaint with the Labor
Arbiter.
a. If you were the Labor Arbiter what would be your action?
The Labor Arbiter should dismiss the complaint for lack of jurisdiction. This case should be discussed in
the grievance machinery. The grievance machinery has jurisdiction over cases involving the interpretation
and/or implementation of company personnel policies. This case involves company personnel policies.

b. When the grievance was not resolved, the case was submitted for voluntary arbitration.
Assuming that Mr. A lost in the voluntary arbitration, is it proper for Mr. A to appeal to the NLRC?
NO. While there is an express mode of appeal from the decision of a Labor Arbiter, Republic Act No.
6715 is silent with respect to an appeal from the decision of a voluntary arbitrator. Pursuant to Luzon
Development Bank (64 SCRA 918,1995) ruling, the decision or award of the voluntary arbitrator is
appealable to the Court of Appeals in line with the procedure outlined in Revised Administrative Circular
No. 1-95 issued by the Supreme Court.
In Volkschel Labor Union vs. NLRC, on the settled premise that the judgments of courts and awards
of quasi-judicial agencies must become final at some definite time, this Court ruled that the awards of
voluntary arbitrators determine the rights of parties, hence, their decisions have the same legal effect as
judgment of a court. In Oceanic Bic Division vs. Romero, this Court ruled that “ a Voluntary Arbitrator by the
nature of her functions acts in a quasi-judicial capacity. Thus, whether acting solely or in a panel, it enjoys
in law the status of a quasi-judicial agency but independent of, and apart, from the NLRC, since its
decisions are not appealable to the latter but to the Court of Appeals.”

32. The company terminated certain employees under a union security clause in the CBA for disloyalty.
The employees filed a case for illegal dismissal with the Labor Arbiter of the NLRC. The Union
alleges that the jurisdiction lies with the grievance machinery in the CBA. Who has jurisdiction?

The Labor Arbiter has jurisdiction. The reasons are the following:

a. While the interpretation/implementation of CBA provisions fall within the jurisdiction of the grievance
machinery/voluntary arbitration, whenever there is a dispute it shall fall with the Labor Arbiter;

b. At the time that the employees were terminated, they had already left the union and were therefore
not under the CBA providing for the grievance machinery. Only disputes between the union and the
company are settled in the grievance machinery. In the present case, the company and the union
are united and the dispute is between the company and the non-union employees. (Sanyo Phils.
Workers vs. Caniares, 211 SCRA 361).
33. Union leaders of Kagandahan Union alleged that the management refused to implement a provision
of the CBA despite a letter written by the union requesting for the said action. As a result, the union
decided to call for a strike on ULP.
a. Comment on the action of the union.

The action of Kagandahan Union is erroneous. According to Art. 261 of the Labor code, mere violation
of the CBA is not ULP. To be considered as ULP, there should be a flagrant and malicious refusal to
comply with the economic provisions of the agreement. In this case, since the union only sent one letter,
this does not amount to a flagrant and/or malicious refusal of the company to comply with the CBA.
The proper action for the union is to file a complaint in the grievance machinery. If it remains
unresolved, the case shall be referred to the voluntary arbitrator.

b. Assuming that the union sent 10 letters, which remained unanswered and the company’s act
constitute ULP, can the case be referred for VOLUNTARY ARBITRATION without passing the
grievance machinery?

YES. Generally, ULP is subject to compulsory arbitration (Labor Arbiter). But the ULP can also be
submitted to voluntary arbitration upon agreement of the parties to the dispute, without passing the
grievance machinery.

As a general rule, voluntary arbitrators have jurisdiction over unresolved grievances. However, this
unresolved grievance refers to interpretation and implementation of the CBA, which does not constitute
ULP. In case it becomes ULP, this can be referred to voluntary arbitrators under Art. 262 which grants the
voluntary arbitrator power to hear and decide ALL OTHER LABOR DISPUTES, including ULP and
bargaining disputes.

34. Under the CBA, the union cannot strike due to the “no-strike clause”. Does this provision cover
both ULP strike and economic strike.

A “non-strike clause” prohibition in a CBA is applicable only to economic strikes. Thus, a strike due to
ULP, is still no violation of the stipulation.

35. What is the Doctrine of MEANS and PURPOSE?

A strike is legal when lawful means concur with lawful purpose. Or, a strike may be legal at the start
but it may be declared illegal when the means used in attaining the same is illegal.

36. X was hired by Y University to teach on a probationary basis. Attainment of a permanent status is
conditioned upon passing the PBET or Professional Board Examination for Teacher. X failed to
pass the PBET for three times. X University did not renew her contract of employment on the
ground that she failed to qualify as regular teacher. X filed a complaint for illegal dismissal,
payment of backwages, and reinstatement against Y University. He contends that the prerequisite
prescribed by Y University that teachers pass PBET to attain regular employment has no legal
basis because it is not stipulated in the CBA. Is the contention of X correct?

No. The provision in the CBA does not mention that passing the PBET is a prerequisite for attaining
permanent status as a teacher. Nevertheless, CBA provision must be read in conjunction with statutory
and administrative regulations governing faculty qualifications. It is settled that an existing law enters into
and forms part of a valid contract without the need for parties expressly making reference to it (Escorpizo
v University of Baguio)

37. X, the union president stopped working. This was followed by the “walk-out” of other members of
the union form their jobs. Y Corporation dismissed the said employees. The union filed against Y
Corp. contends a case for unfair labor practice and illegal dismissal before the NLRC. Y Corp
contends that the employees were dismissed due to abandonment of work. Is the dismissal of the
union members valid due to abandonment of work?

Abandonment, as a just and valid ground for dismissal means the deliberate and unjustified refusal of
an employee to resume his employment. The burden of proof is on the employer to show an unequivocal
intent on the part or the employee to discontinue employment.

For abandonment to be valid ground for dismissal, two elements must be proved: the intention of an
employee to abandon, coupled with an overt act from which it may be inferred that the employee has no
more intent to resume his work.
 It must be stressed that abandonment of work does not per se sever the employer-employee
relationship. It is merely a form of neglect of duty, which is in turn a just cause for termination of
employment, the operative act that will ultimately put an end to this relationship is the dismissal of an
employee after complying with the procedure prescribed by law. If the employer does not follow this
procedure, there is illegal dismissal (De Paul/King Philip Customs Tailor, et al. v NLRC)

38. On June 5, 1990, in the course of inspection, a labor inspector interviewed Ms. X about the
operation of Times Cooperative Canteen. As a result of the interview made without authority from
Times, private respondent was dismissed from the service on the ground of serious misconduct.
Ms. X filed a complaint for illegal dismissal, underpayment of wages, non-payment of wages and
13th month pay. But, in the meantime, she sought employment at the University of Northern
Philippines Multi-Purpose Coop. Ind. (UNP Coop., hereafter). The labor arbiter decided the case in
favor of Ms. X which was later on affirmed by NLRC.

It was alleged by Times in its motion for reconsideration that the income earned by Ms. X from UNP
Coop. During the pendency of the action for illegal dismissal should be deducted from the total
amount of backwages and other benefits awarded.

Whether or not the amount earned by Ms. X during the pendency of the illegal dismissal case
should be deducted from the monetary awards.

The amount earned by Ms. X during the pendency of the illegal dismissal case should not be deducted
from the monetary awards.

Times stance that Ms. X’s earnings elsewhere, if any, be deducted from the backwages awarded to
him, has now completely lost legal and doctrinal support. As held in Bustamante v NLRC, comformably
with the evident legislative intent as expressed in Rep. Act No. 6715, “backwages to be awarded to an
illegally dismissed employee, should not, as a general rule, be diminished or reduce by the earnings
derived by him elsewhere during the period of his illegal dismissal. The underlying reason for this ruling is
that the employee, while litigating the legality (illegality) of his dismissal, must still earn a living to support
himself and family, while full backwages have to be paid by the employer as part of the price or penalty he
has to pay for illegally dismissing his employee.

39. Four requisites for losses to be a valid ground for retrenchment

1) Losses expected should be substantial

2) Losses must be imminent
3) The retrenchment must be reasonably necessary to prevent expected losses.
4) The expected imminent losses (or losses actually incurred) must be proven by sufficient and convincing
evidence (Catatista v NLRC, 247 SCRA 46)

40. May the employer and the employee validly agree to extend the probationary period beyond six
months?

Such an extension may lawfully be agreed upon, despite the seemingly restrictive language of Article 281.
A voluntary agreement extending the original probationary period to favor the employee constitute a lawful
exception to the statutory limit (Mariwasa Manufacturing, Inc. v Hon. Leogardo Jr., Jan. 26, 1989)

41. a. What is the rationale for the payment of back wages?

In Bustamante vs. NLRC, it was held that the evident legislative intent as expressed in R.A. 6715,
back wages to be awarded to an illegally dismissed employee, should not, as a general rule be diminished
or reduced by the earnings derived by him elsewhere during the period of his illegal dismissal. The
underlying reason is that the employee, while litigating the legality of his illegal dismissal, must still earn a
living to support himself and his family, while full back wages have to be paid as part of the price or penalty
the employer has to pay for illegally dismissing his employee.

b. Distinguish between back wages and unpaid wages.

Back wages are the wages that could have been earned by an employee and must be paid due to
illegal dismissal. Unpaid wages are wages earned prior to illegal dismissal but are not yet paid to the
employee.
 c. Distinguish between back wages and separation pay.
Payment of back wages is specifically designed to restore an employee’s income that was lost because
of his unjust dismissal. On the other hand, payment of separation pay is intended to provide the employee
money during the period in which he will be looking for another employment.
In case of dismissal with a just or authorized cause but there was a violation of the employees right to
procedural due process, back wages and separation pay may be granted at the same time.

42. Distinguish the exercise of the visitorial and enforcement powers of the Secretary of Labor and
Employment under Article 128 from that of the adjudicatory power of the DOLE Regional Directors by
virtue of the provisions of Article 129 and that of the Labor Arbiters pursuant to Article 217 as well as
those of Voluntary Arbitrators in the light of the provisions of Article 261 and 262 of the Labor Code.

ART 128 ART 129 ART 217 VA

How Initiated Routine Complaint Complaint Complaint
Inspection
Existence of With Without Without With
Employer-
Employee
Relationship
Jurisdictional no limit P5,000.00 below No Limit No limit
Limit
Subject Matter Labor Standards Money claim Art 217 Art. 261
and other Social arising out of All cases and Interpretation
Legislations employer- other claims and
employer involving implementation
relationship employer- of CBA and
involving any employee Interpretation
employee or a relationship and Enforcement
person engaged except of Company
in household otherwise Personnel
service provided in Art. Policies.
128, 129. 261 Art. 262
and 262. Other matters
submitted by the
parties for
voluntary
arbitration.
Where to Appeal to Sec. Appeal to the Appeal to the Court of Appeals
Appeal of appropriate appropriate
Labor NLRC Division NLRC Division

Posting of Required if it Not required Required if it Not required

Bond involves a involves money
monetary award Judgment
or judgment
Period of 7) 10 calendar 5 calendar days 10 calendar 15 days
Appeal days from receipt days
Claim for 8) Not Without With or Without Without
Reinstatement Applicable
Who exercise 9) Sec. of Labor Regional Labor Arbiter VA as previously
the power or his duly Div/Head Office determined by
authorized the parties in the
Representative CBA or as may
be designated by
the NCMB

43. X, a bachelor, dies after being a member of the SSS for ten (10) years. Death benefits are claimed
by Miss K., his girlfriend of many years and whom he designated as his beneficiary. The claim is
contested by Y, the brother of the deceased. Y argues that he is preferred over Miss K. Decide with
reasons.

Miss K is entitled to the death benefits. Y, the brother of the deceased is not among the primary or the
secondary beneficiaries specified by law. On the other hand, since the deceased had no blood relatives
 qualified to be his primary or secondary beneficiaries, he could designate any other person, like Miss K as
his beneficiary.

44. Mr. Y worked in the government for 10 years before resigning and working in a private corporation.
He subsequently retired. May his contribution under the GSIS be credited to the SSS record?
YES. Under R.A. 7699 instituting a LIMITED PORTABILITY SCHEME IN THE SOCIAL SECURITY
SYSTEM, a covered employee or worker who transfers employment from one sector (public or private
sector) to another, is employed in both sectors, shall have his creditable services or contributions in both
systems credited to his service or contribution record in each of the systems and shall be totalized for
purposes of old age, disability, survivorship and other benefits in case the covered member does not
qualify for such benefits in either or both systems without totalization, Provided, however, that overlapping
periods of membership shall be credited only once for purposes of totalization.
The theory of portability and totalization schemes as regards employees creditable contributions to the
GSIS and the SSS means that, the contributions of an employee with the afore named government
agencies could be transferred to either and shall be computed in the totality for purposes of the availment
of benefits by an employee either under the GSIS and SSS laws.

45. What are the benefits under the SSS?

The SSS law provides not only retirement benefits but also death and funeral benefits, permanent
disability benefits, sickness benefits and maternity leave benefits.